Premier League club revenues reach record UK£4.5 billion

Premier League club revenues reach record UK£4.5 billion
The clubs in English soccer’s top flight, the Premier League, reported record combined turnover of UK4.5 billion (US$6.3 billion) in the 2016/17 season, returning to profit, according to analysis from professional services firm Deloitte.

The revenue represents a 25 per cent increase on the UK£3.6 billion generated in the 2015/16 season, and was driven by new domestic and international broadcast deals worth over UK£8 billion, including UK£5.14 billion from UK live rights agreements with pay-TV operators Sky and BT Sport.

Deloitte calculated collective pre-tax profit at a record UK£500 million, which is almost three times the previous high of UK£200 million in 2013/14.

Combined operating profits doubled to UK£1 billion in the Premier League in 2016/17.

Wage costs rose by nine per cent to a record UK£2.5 billion, which represents a significantly lower growth rate than that of revenues.

The revenue to wage ratio fell from 63 per cent to 55 per cent, which is the lowest figure since the 1997/98 season.

Dan Jones, partner and head of the Sports Business Group at Deloitte, said: “This relative restraint from Premier League clubs reflects both the extent of their financial advantage over other leagues and the impact of domestic and European cost control measures.”

Premier League clubs have collectively made a pre-tax profit in three of the last four years. 2015/16 saw a combined loss of UK100 million, which was attributed to a small number of one-off exceptional costs.

Sky and BT Sport have retained live rights for three years starting in 2019/20 in deals worth a total of UK£4.46 billion, though this figure represents a decrease of UK£700 million on the amount they spent in the last auction.

Two packages comprising 40 live games per season for the next cycle are still to be sold.

Jones added: “Although we anticipate wage costs will continue to rise in the coming seasons, we do not foresee increases to be at a level which can jeopardise the profitability of the Premier League as a whole. The most significant wage increases have tended to occur in the year prior to the commencement of a new broadcast cycle once a substantial revenue increase is secured.

“Despite the lack of growth in domestic broadcast deals announced to date, we still expect to see overall revenue growth in the coming seasons, and if this is complemented with prudent cost control, we expect that pre-tax profits will be achieved for the foreseeable future.”

 

 

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